Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: limtex who wrote (70873)	5/23/2002 9:43:39 PM
From: LTK007	Read Replies (2) \| Respond to of 99280

<<I mean what if there is a recovery in the economy>> the "what if" is just that "what if", i am at the stage in the age chain,where "what if" won't work. Plus, in my view,the market hasn't yet priced itself correctly relative to a prolonged slow recovery. Look at the drop in HD at the mere hint that growth may be slackening ( the priced to perfection syndrome). But , regards the Durable Goods number today. I think the briefing.com commentary on that number is a must read. Bold face as usual mine, this is the only "spin device" i have at my command:) <<Highlights April durable goods orders 1.1%. Ex-transportation orders 2.9%. Key Factors 5th consecutive gain given an upward revision to March from -0.5% to 0.2%. Broad-based among the core components as both aircraft and defense orders fell sharply. Ex-transportation 2.9%, ex-defense 3.4% as non-defense capital goods rose 1.9% -- nice gains. Transportation -2.6% as motor vehicle orders surged 12% and aircraft fell -37% after almost doubling in Q1. Gains among all the major components (ex-transportation) -- metals, machinery, electronics and appliances. Non-defense capital goods rose for only the 2nd month in the last 5. Best read on business investment. Semiconductors were pulled from the measure in March (not enough input). Steals a key leading component. Still no signal of an sustainable upturn in business investment. Increased stability but no sustainable lift. Big Picture The collapse in demand given the corporate profit recession, burst investment bubble, economic recession and now large excess capacity leaves little return on capital investment and shows its effect on high priced durables goods and the manufacturing sector which produces them. Wild volatility camouflages the sharp drop in orders which has led industrial production and manufacturing employment sharply lower. Weakened global demand adds to the caution surrounding domestic demand. A flattening trend has taken shape since the plunge timed with the Sep attacks leaving increased stability but no sustainable upturn which the expansion depends on. A sustainable rise in business investment -- key for a manufacturing recovery and overall growth -- waits for improvement in profits and capacity use. Eye the volatility and the growing stability in the table/charts.